According to the Item Database, (Found by being in forum, going to "Game Guide," then "Item Database.") Large Rubies can be obtained by killing anything in the Cave to Midnight Mountain zone, top or bottom where it's purple-y. Every monster or whatever you call them in that zone has a really low 5% chance to drop it. Since they are easier to kill, I would just farm Bloodfangs until one of them drops it.
Hopefully any of this makes sense~